SIRI Intraday Updates for the Week of 2/16/09

[xitvp]

http://www.forbes.com/2009/02/17/ran...rtner=yahootix

Sirius XM Radio: We don't usually color activity on penny stocks, but we found Sirius XM Radio (nasdaq: SIRI - news - people ) on our market scanner Tuesday after it secured a $500 million loan from John Malone at Liberty Media. Option trading in Sirius on Friday was huge, and it appeared that investors were taking a cheap and long-run shot at the company's revival before next January's option expiration. Some 20,000 calls at the 2.50 strike price were traded at that expiration ahead of desperate discussions aimed at rescuing the company from its debt burden. Tuesday, a further 2,945 contracts have been bought for a nickel while its shares have doubled over the weekend to just 20 cents. Thanks to an extremely elevated reading of implied options volatility at that strike price (193%), the current reading of delta implies a one-in-three chance of shares in Sirius XM trading back up to $2.50 by that time.

[Bulldog17]

http://messages.finance.yahoo.com/St...&frt=4#4063391

[just sirius]

newman

Help me out here! is Siri paying 15% interest on the 1st installment or on the whole loan? and giving Malone 40% stake in company, and must payback the loans. So he gets, if he converts the preferred shares to common 2B+ shares just for loaning the company cash! that sounds like a screw job IMHO!!! But better than BK

[just sirius]

Newman

Let me try again...Once malone is issued his 12.5M in preferred, are the loans then considered paid or did we just get hosed?

[Newman]

I will shamefully admit that I have yet to read the entire filing to see what the terms and conditions were... When I do, I will get back to you.

[Newman]

Ok, here we go.

SEC Filing

Phase One: This is known as the Sirius Credit Agreement. $280 million dollar credit agreement. Interest is 15%, matures December 20th, 2012. They immediately drew all of the credit, paying 30 million as a setup fee, and 250 million to pay off debt and "corporate expenses". This part is DONE.

Phase Two: Sirius XM agrees to give out 12.5 million in preferred stock (The "Investment Agreement"), which can be exchanged for 40% of the company in common stock. In exchange, Liberty Media will give XM a credit line of $150 million and agrees to buy up $100 million of bank notes due in May 2009. This portion is known as the XM Credit Agreement.

The way the filling is written, it sounds like the preferred stock is given out IF AND ONLY IF Sirius draws under the "XM Credit Agreement."

In addition to this, there is a clause that states: After April 15, 2009, we may terminate the Investment Agreement if our Board of Directors determines it is in our best interests to do so. This means that if they are able to secure more favorable financing somewhere else, they can terminate this deal with Malone and never have to give up 40% of the company. Of course, if they terminate the "Investment Agrement", the Sirius Credit Agreement can be called back for 105% of face value, or $294 million plus a $7 million cancelation fee.

So basically: Malone came to the rescue, and we as shareholders have the potential of getting screwed but we stave off bankruptcy for now. If the economy improves and banks start lending again, we could buy back our debt (and our company) and have lost nothing but a bit of time and about 51 million dollars.

This is "ugly financing" but with a loophole out of it. The key issue here is the economy. Will Sirius XM be able to refinance debt before they have to draw on that extra 250 million? It looks like the Sirius Debt Refinance Search continues... as will the drama of this stock.

Homer or anyone care to correct anything I may have misunderstood?

[thedude110]

and we as shareholders have the potential of getting screwed but we stave off bankruptcy for now.

Mmm. Expand.

"Screwed" as in "diluted," not "screwed" as in "All your money are belong to us," yes?

[sxminvestor]

Mmm. Expand.

"Screwed" as in "diluted," not "screwed" as in "All your money are belong to us," yes?

"Screwed" if you bought at $ 5 and are not adding shares. But the fact of the matter is, Sirius even with 6 billion shares is extremely undervalued at .18 cents. So unless your not buying up shares here, you will be upset at the deal and share count. The stock will likely at least triple from here as Sirius improves balance sheet and renegs May 350M loan.

Think about it - the market cap would be about 3 billion at .50 cents. At the peak, Sirius and XM were each 10 Billion each.

Malone was very clear in the value he saw and how undervalued the asset is and finally how impressed he was with the management team led by Mel.

[Siriusowner]

Siriusowner,

You really need to do some homework before you start accusing people of being wrong.....

You are wrong yet again.......SIRI was removed from the NASDAQ 100 in December. Here is the official PR from the NASDAQ. Notice SIRI at the bottom in bold where it lists the companies being removed. I don't even care if you admit that you are wrong or not - I'm just trying to point out the facts for the readers of this forum....



http://www.nasdaq.com/newsroom/news/...AQ-100%20Index

NASDAQ Announces the Annual Re-Ranking of the NASDAQ-100 Index

NEW YORK, Dec. 12, 2008 (GLOBE NEWSWIRE) -- The NASDAQ OMX Group, Inc. (Nasdaq:NDAQ) announced today the annual re-ranking of the NASDAQ-100 Index(r), effective with the market open on Monday, December 22, 2008.

"The NASDAQ-100 Index is a globally recognized brand that includes 100 of the world's most dynamic non-financial companies," said NASDAQ OMX Executive Vice President John L. Jacobs. "Through an objective, transparent re-ranking process, the NASDAQ-100 Index continues its evolution as a relevant, investable benchmark. The NASDAQ-100 represents a diverse range companies and provides investors with a key measure of the performance of the world's leading large-cap growth companies."

The following 11 issues will be added to the NASDAQ-100 Index: Automatic Data Processing, Inc. (Nasdaq:ADP), First Solar, Inc. (Nasdaq:FSLR), Life Technologies Corporation (Nasdaq:LIFE), Ross Stores, Inc. (Nasdaq:ROST), Maxim Integrated Products, Inc. (Nasdaq:MXIM), Illumina, Inc. (Nasdaq:ILMN), Pharmaceutical Product Development, Inc. (Nasdaq:PPDI), O'Reilly Automotive, Inc. (Nasdaq:ORLY), Urban Outfitters, Inc. (Nasdaq:URBN), J.B. Hunt Transport Services, Inc. (Nasdaq:JBHT), and Warner Chilcott Limited (Nasdaq:WCRX).

The NASDAQ-100 Index is composed of the 100 largest non-financial stocks on The NASDAQ Stock Market(r) and dates to January 1985, when it was launched along with the NASDAQ Financial-100 Index(r), which is comprised of the 100 largest financial stocks on NASDAQ(r). These indexes were originally designed to segment NASDAQ into two major industry groups to support media coverage and to act as benchmarks for financial products such as options, futures, and funds. The NASDAQ-100 is re-ranked each year in December, timed to coincide with the quadruple witch expiration Friday of the quarter.

On a cumulative price return basis, the NASDAQ-100 Index has returned 797% since inception, although past performance is not indicative of future performance.

The NASDAQ-100 Index is the basis of the PowerShares QQQ Trust (Nasdaq:QQQQ), which aims to provide investment results that, before expenses, correspond with the NASDAQ-100 Index performance. In addition, options, futures and structured products based on the NASDAQ-100 Index and the PowerShares QQQ Trust trade on various exchanges.

As a result of the re-ranking of the NASDAQ-100 Index, the following 11 securities will be removed: Amylin Pharmaceuticals, Inc. (Nasdaq:AMLN), Cadence Design Systems, Inc. (Nasdaq:CDNS), Discovery Communications, Inc.'s Class A Common Stock (NasdaqISCA), Lamar Advertising Company (Nasdaq:LAMR), Leap Wireless International, Inc. (Nasdaq:LEAP) Level 3 Communications, Inc. (Nasdaq:LVLT), PetSmart, Inc. (Nasdaq:PETM), Sirius XM Radio Inc. (Nasdaq: SIRI), SanDisk Corporation (Nasdaq:SNDK), Virgin Media Inc. (Nasdaq:VMED), and Whole Foods Market, Inc. (Nasdaq:WFMI).

Well yes I was wrong, I do not read the news about SIRIUS every f@#@# day and the NASDAQ did not have them in their history as being kicked out (WHICH IS WHAT I WAS READING WHEN I POSTED THE ORIGINAL STATEMENT). Besides, who cares, it seems to SIRIUS has postponed their reckoning rather than avoid it.

[sxminvestor]

Ok, here we go.

SEC Filing

Phase One: This is known as the Sirius Credit Agreement. $280 million dollar credit agreement. Interest is 15%, matures December 20th, 2012. They immediately drew all of the credit, paying 30 million as a setup fee, and 250 million to pay off debt and "corporate expenses". This part is DONE.

Phase Two: Sirius XM agrees to give out 12.5 million in preferred stock (The "Investment Agreement"), which can be exchanged for 40% of the company in common stock. In exchange, Liberty Media will give XM a credit line of $150 million and agrees to buy up $100 million of bank notes due in May 2009. This portion is known as the XM Credit Agreement.

The way the filling is written, it sounds like the preferred stock is given out IF AND ONLY IF Sirius draws under the "XM Credit Agreement."

In addition to this, there is a clause that states: After April 15, 2009, we may terminate the Investment Agreement if our Board of Directors determines it is in our best interests to do so. This means that if they are able to secure more favorable financing somewhere else, they can terminate this deal with Malone and never have to give up 40% of the company. Of course, if they terminate the "Investment Agrement", the Sirius Credit Agreement can be called back for 105% of face value, or $294 million plus a $7 million cancelation fee.

So basically: Malone came to the rescue, and we as shareholders have the potential of getting screwed but we stave off bankruptcy for now. If the economy improves and banks start lending again, we could buy back our debt (and our company) and have lost nothing but a bit of time and about 51 million dollars.

This is "ugly financing" but with a loophole out of it. The key issue here is the economy. Will Sirius XM be able to refinance debt before they have to draw on that extra 250 million? It looks like the Sirius Debt Refinance Search continues... as will the drama of this stock.

Homer or anyone care to correct anything I may have misunderstood?

Newman,

I read it the same way. It looks very clear that if Sirius can come up with a better deal for the debt by April 15th, they can present it to Malone and get out of this present one. But how could you complain that he has given this type of lifeline so that Sirius now has a gauge to go by in negotiating the balance of their debt and even possibly getting a better deal than they now have.

And so they may have to draw on the 250M, but they need it to get through the year. If it's not this 250M, it's another 250M from some other financer, except maybe at a little lower rate without so many strings attached.